What is the economic cost of Alzheimer's disease?

Dementia is a significant public health issue throughout the world and will be one of the costliest health conditions to manage by the end of the decade. In 2021, treating Alzheimer’s disease in the UK alone cost 16 billion pounds. To explain how the economics stack up is Oxford University’s Ramon Luengo-Fernandez…

Ramon - So we've estimated, me and my team, the cost of dementia for 2018, taking into account healthcare costs such as NHS hospitals and drugs, social care costs, such as being in a nursing home, people coming to people with dementia homes to look after them, the cost of informal care ie spouses, children, family, other family, friends, and the cost of mortality - so early mortality, not being able to earn money or being part of the labour market or the cost of early retirement. So in 2018, we've estimated the course for dementia to be around 16 billion pounds.

Chris - It's a lot, isn't it?

Ramon - Yeah, it is a lot. Especially if you take into account the cost of institutionalisation into nursing and residential care homes and of course they're not direct where nobody pays their spouse who's taking care of their bowels with dementia. And these are the really big costs.

Chris - I suppose one way to make it more relevant or to give us a comparison is to think about other conditions which are fairly major causes of loss of life or ill health, and then look at what they cost. So if we take things like heart disease and stroke and so on, common things, how much do they cost us in comparison to a case of Alzheimer's disease?

Ramon - For heart disease, we estimated the cost in exactly the same way, looking at all the same costs, similar to dementia, so at 15 billion pounds, and for stroke it was 11 billion pounds. But the interesting thing is to see how the cost to distribute or who pays the cost. So for example, for heart disease, most of the costs are incurred by the NHS and also by people because heart disease is a disease of old age, it's more common to happen in working age than diseases such as dementia. So of course the early mortality costs will be higher than for dementia.

Chris - How do we anticipate that these costs, and particularly the dementia costs, are going to change with time? Because we're being told regularly we have an aging population, more people are living longer, and therefore they're living into the age regime where diseases like Alzheimer's become more common. So not only are we going to have more people who are at risk, we're going to get more cases and they're going to be around for longer, costing more money. So how do we expect this to change?

Ramon - So if we assume that nothing else changes, that the cost doesn't change, the number of people going into nursing homes doesn't change, and the amount of time people spend in hospital, if they're admitted, doesn't change. Just this projected ageing of the population will double cost. So if we expect the cost of dementia to be in 2018, about 17 billion pounds, then in 2050, we're projecting these costs due to population ageing alone to be around 34 billion costs. So a doubling of costs.

Chris - Is the impact not even more acute than that in the sense that if we think about where we were 50 years ago when things like the National Health Service were created and people were using old age pensions, the number of people who were in work productive in society and paying into the system to fund that was 10 or 20 people. For every person who was in the category of retiree or chronic ill health. And owing to the factors you've just been describing, we are now into an area where there might be as few as three workers for every consumer who's retired or in chronic ill health. And does that not mean that even the impact on society, it's not just as simple as saying the cost has doubled because the cost per person has presumably become even more acute?

Ramon - Yeah, absolutely. So in terms of society, the cost will be 30 billion. So we're doubling. It's to see who will pay these costs. So at the moment, the majority of the NHS, it's paid by the working age population through income tax and national insurance. Of course, if you've got less people paying income tax and national insurance, that means that there will be much more pressure if nothing else changes on these people. And you can't, some people would argue, keep taxing just to pay the NHS. So there might be ways on how we finance the NHS and more importantly for dementia, the social care system.

Chris - Although as you were saying that for some aspects of healthcare, the system pays, but for things like dementia, the burden often falls disproportionately on close family, et cetera, in order to almost make up a care gap.

Ramon - The big drivers of these conditions are social care and informal care i.e. people, your loved ones taking care of you. So of course social care, although a big chunk is paid by the state or local government, a huge other chunk is still paid by patients or their families. So it means that there might be an inequity in that if you've got dementia or stroke, you are more at risk of paying for your own care than if you have cancer or heart disease. And I don't think that's something that's being directly talked about.

Chris - Indeed. And what should politicians be saying, policy makers be thinking about them in terms of planning for this time bomb. I can't think of a better way of describing it than the time bomb that's ticking in our population.

Ramon - So from an economic argument, what you would say is you would want to invest to either mitigate these costs or to reduce them. And what's the biggest investment you can do in healthcare? One of the biggest investments is on research. So for example, we've been very good in cardiovascular disease in delaying the onset of you having a stroke or you having a heart attack. If you keep delaying the age of which you will have as a drug, probably you'll end up dying of other things. So of course it is dementia research, something that would probably generate a lot of good for each pound that the government invests.